Cashless festivals to take off in 2012, with NFC to follow in 2013

Following the successful trial of Mastercard’s PayPass prepaid wristbands at the UK’s Isle of Wight Festival last June, cashless music events are set to take off in 2012 — with NFC in wide use by 2013.

The wristbands proved to be a huge success, says IVS, with the overwhelming majority of users saying they would definitely use it again at future festivals, concerts and sporting events.

The Isle of Wight trial marks a tipping point for cashless payment at festivals and other events, the company’s Paul Pike told NFC World. Other cashless systems already in use, such as vouchers and tokens, cause problems for customers as they are closed loop, Pike explains, so only work inside the venue; outside of the event, the customer’s cash is trapped on the token and is often non-refundable.

Also there is the need to buy tokens and vouchers, so users need to queue up to get cash, then queue again to get tokens, all before they can join the queue for the bar. And finally, retailers inside venues have to ensure their pricing matches the price size of the various tokens to keep the system cash free.

But Pike asserts that, thanks to large partners like Mastercard, contactless and barcode technology will end these problems: “The Isle of Wight Festival has been a real tipping point for cashless festivals. The whole point of working with Mastercard, for us, was to work with a company that can work in both a closed loop and open loop environment, so customers can spend money on their wristband elsewhere.

“This year was the trial, and next year we expect to be in a position to break this out more, with any form factor device driven by a virtual account that will be usable outside of events at any retailer with a contactless card reader.”

“A mobile wallet on the phone will solve a lot of problems.”

NFC payments on the mobile phone are the ultimate goal for cashless festivals, adds Pike. He says: “A mobile wallet on the phone will solve a lot of problems. Everyone walks around festivals with their phones, whereas many are more reluctant to walk around with their cash cards. NFC-enabled mobiles can be combined with something visual, like a wristband, for access to areas and ID.

“Sometime next year we’ll start to see NFC payments come in, depending on what devices are available; NFC is part of Mastercard’s armoury for next year. NFC mobile payments will be trialled next year at festivals, bedding it down, and in 2013 I expect it to come into its own,” he explains.

Pike notes that the system is secure for end users: “Prepaid wristbands are not directly linked to your bank account. You load up as much money onto them as you intend to spend, and can simply top up as required. If you are unfortunate enough to lose it or have your wristband stolen, the nearest ‘luminous jacket’ can report it and it can be immediately cancelled and reissued. It would be impossible to offer the same security guarantees with a cash theft.”

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Somebody not a million miles from where I am sitting now once memorably lost her mobile in a long-drop pit latrine at the Glastonbury Festival. Oh how much more fun it would have been if it was her wallet too! 🙂